Recently, Brazil’s Special Department of Federal Revenue announced that they will begin collecting information from foreign crypto exchanges in order to ensure that their operations are in compliance with local regulations. This move comes as a response to the need to regulate the growing crypto market in the country.
The Deputy Secretary of Inspection, Andrea Chaves, highlighted the department’s concerns about understanding how foreign exchanges operate in Brazil and whether there are any illegal activities taking place. The tax department aims to gather information about Brazilian wealth that should be subject to taxes, further emphasizing the need for transparency and compliance.
With the introduction of regulations in 2019, the tax department is keen on ensuring that foreign exchanges interact with local service providers and provide the necessary details required by the regulations. Unlike local Brazilian exchanges, foreign companies have not been required to report transactions, making it crucial for the tax department to collect this information through a new ordinance expected to be released soon.
According to recent data cited by Reuters, individuals and legal entities have reported higher crypto amounts over the past year, indicating a significant rise in crypto activity in Brazil. Tax reporters declared 133.6 billion reals of crypto, including 14.5 billion reals on foreign exchanges, during the first half of 2023, showcasing substantial growth compared to the previous year.
Brazil’s tax department is planning to release updated data through technological means to enhance their monitoring and regulatory capabilities. Additionally, recent third-party data from Kaiko Research shows that the Brazilian real has been involved in $6 billion worth of crypto trading volume between January and early May 2024. This growth in trading volume indicates the increasing prominence of Brazil in the global crypto market.
Brazil’s tax department’s initiative to collect information from foreign crypto exchanges marks a significant step towards ensuring regulatory compliance and transparency in the country’s crypto market. With the growing interest in cryptocurrencies and the need for proper oversight, it is crucial for regulatory bodies to adapt and evolve their processes to keep up with the changing landscape of financial technologies.
Leave a Reply